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MoF aims to increase audit transparency

Update: November, 12/2013 - 08:54
Accordingly, auditors who received or asked for a sum of money from audited companies will be fined from VND10 million (US$470) to VND20 million ($940).— Photo cafef

HA NOI  (VNS) — A draft circular by the Ministry of Finance will afford greater powers to the State Securities Commission to supervise the auditing of listed companies, securities companies and fund management companies.

The move aims to improve auditing quality and provide a higher level of transparency for investors amid the bankruptcies of several listed companies which posted sound financial results.

The recent case of the Vien Dong Pharmacy Company, where auditors vouched for the company's profitability just before it collapsed, was one of many cases leading to a high level of scepticism on the quality of company audits.

According to Nguyen Hoang Hai, general secretary of the Viet Nam Financial Investors Association, who spoke with Dau Tu Chung Khoan (Stock Investment Magazine), investors were justified to doubt the integrity of auditing results, some of which had been distorted by companies to keep investors.

The risk of investing is inherently higher when decision are based on falsified results, he said, adding that the ministry's draft would help restore investor confidence, according to Hai.

However, Hai urged the State Securities Commission to take a tough stance on violations, adding that violations needed to be announced publicly. The collusion between audit and audited companies must be handled firmly.

The Government's Decree 105/2013 will detail tougher punishments for illegal accounting and auditing, which will take effect from the beginning of next month.

Accordingly, auditors who received or asked for a sum of money from audited companies will be fined from VND10 million (US$470) to VND20 million ($940).

Auditors will be eligible for six to 12 month suspensions, if found colluding with companies to provide distorted results. — VNS

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